Here’s why electric car sales are plummeting in Georgia

Reprinted here is the entire story written by AJC staff writer Chris Joyner published on line on January 13th and in newsprint on January 16, 2017. Copyrighted material – Atlanta Journal Constitution.

Here’s a fact maybe not generally appreciated by commuters gazing at Atlanta’s smudgy, smoggy skyline: Georgia has the second most electric vehicles in the nation.

Here’s another fact: Not for long.

Georgia has about 25,000 electric cars on the road, mostly in metro Atlanta and largely funded by what was one of the most generous state tax incentives in the nation — a $5,000 state income tax credit. But state lawmakers, many of them conservatives who are predisposed against consumer tax credits anyway, canceled the credit in 2015 and installed a $200 registration fee instead.

That whipsaw effect pushed new electric vehicle purchases off a cliff. In July 2015, the state registered 1,426 electric vehicles purchased as the tax credit expired. The next month, just 242 were registered — that’s an 83 percent drop and sales have not rebounded.

The impact also can be seen in the decline of specialty license plate sales for alternative fuel vehicles, which are tied to the registration fee. Every all-electric vehicle — as well as some other alternative fuel vehicles — is subject to a $200 fee. Owner of such cars can opt to get the specialty license plate in return, giving them access to Atlanta’s HOV lanes.

However, since the change in state policy, monthly license plate sales are down nearly 60 percent.

For champions of the clean-fuel cars, the statistics are sobering.

“We should be around 40,000 vehicles now,” said Jeff Cohen, founder of the Atlanta Electric Vehicle Development Coalition. “We’re not growing.”

Backers of alternative fuel vehicles like Cohen have complained that lawmakers turned one of the friendliest states to the electric car into one of the least hospitable.

“According to the Georgia Department of Revenue, sales and leases have dropped over 90 percent,” said Public Service Commissioner Tim Echols, a proponent of the tax credit and owner of two electric cars. “The tax credit was key to our growing this market.”

No one disagrees with that, but it made some conservative lawmakers uncomfortable. Sen. Butch Miller, R-Gainesville, served on a special joint study committee created last year to look into alternative fuel vehicles and said the dramatic decline shows the tax credit only propped up an industry that didn’t have wide consumer support.

“Our previous electric car tax credit was too generous, too rich. We have to strike a balance on what is good for the economy, what’s good for the environment and what’s good for the consumer,” said Miller. “It should be market driven, and a free-market approach answers a lot of questions.”

Credit not likely to be revived

Attempts last year to reinstate a version of the tax credit failed, and the joint study committee met three times last year and issued no recommendations. And Miller made it clear the committee was taking a wait-and-see approach to any new measures.

“At this point it’s really fluid because we are still working on trying to develop the right kind of policy that will move us forward,” Miller said. “With energy prices at their current state, it’s difficult for people to justify the investment in alternative energy and that has slowed the pace of our exploration.”

Advocates hoping the state would consider new incentives got little encouragement from the study committee.

“I’m going be as generous as I can,” said Don Francis, director of Clean Cities Georgia, a federally supported initiative. “I was disappointed at how they approached it and what the output was.”

Francis testified at the final meeting of the study committee that the elimination of the tax credit was costing both consumers and the state money as drivers spent more on gasoline and most of those dollars left the state.

Francis said it was pretty clear the committee wasn’t interested in revisiting the tax credit and instead focused on what the state could do to support business uses for alternative fuels while supporting refueling and recharging infrastructure.

There are no disinterested parties here. Miller, for example, is a car dealer and not for Tesla. Cohen is North American sales manager for General Electric’s vehicle charging stations. Car companies like Chevrolet and Nissan, which produce the most popular all-electric cars, are weighing in as well.

Sales of specialty license plates for alternative fuel vehicles plunged when the General Assembly removed a $5,000 tax credit for electric cars in 2015, as figures from the Georgia Department of Revenue show.

Registration fee highest in nation

But there are legitimate policy questions too.

Should the state put a thumb on the scale to entice consumers to buy one type of car over another? Are consumer tax credits bad policy generally? Doesn’t the state have an obligation to address air quality and climate change by encouraging clean energy?

Francis, Cohen and others who want more state support for electric vehicles are retooling and focusing heavily on the annual registration fee. The fee, which this year will be slightly above $200, is meant to offset the gas tax which electric vehicle owners obviously do not pay but go to fund repairs on the roads everybody uses. However, the indexed fee, which this year will be slightly above $200, is the highest in the nation and there appears to be some support for lowering it.

“I think that’s a realistic priority,” Cohen said.

Cohen is bullish on electric cars (he owns three) and believes that sales will slowly rebound on their own, particularly if the lawmakers reduce the penalty to something less punitive.

“I’d rather see the registration fee addressed to maintain our population,” he said. “I’d rather not fight for a tax credit that market data may not prove we need.”

Francis said there may be a way to return a portion of the tax credit’s incentive by giving buyers a break on sales tax at the point of purchase.

“A lot of states are doing sales tax exemptions rather than credits,” he said.

As the leaves began to turn, three very significant events have taken place which bode well for the advancement of electric vehicles and supporting recharging infrastructure in the State of Georgia.

Hartsfield-Jackson International Airport City of Atlanta Mayor Kaseem Reed has committed to the installation of 300 electric vehicle charging parking spots by the end of 2017. Sources indicate the charging infrastructure will be a mix of Level 1 charging stations, L1 plug-in outlets (owners can plug in their charging cordsets), Level 2 stations and even a few DCFC stations. Regardless, this is a HUGE step forward as the most notable gap for EV charging in metro Atlanta is the airport. The first 100 charging spots will be on-line by the end of 2016 with the remaining 200 coming on stream over the course of 2017.

State of Georgia General Assembly Joint House-Senate Alternative Fuels Infrastructure Study Committee. At the end of the 2016 Legislative Session, a resolution passed forming a Joint Study Committee led by Rep. Bubber Epps and Sen. Jeff Mulls. The committee received testimony during three sessions (Macon, Ringgold, Atlanta) and concluded their public hearings on November 9th.

During the last meeting at the State Capitol, electric vehicle testimony was provided by Nissan North America, the City of Atlanta (Director of Sustainability Stephanie Stuckey Benfield) and CleanCitiesGeorgia. The latter was provided by Executive Director Don Francis, whom everyone knows is the “Godfather of EV Charging” in Georgia.

Don made a fact based presentation to the Joint Committee seeking to demonstrate:

PHEV sales in Georgia are falling. While the State of Georgia is still #2 in the nation with 24,328 plug in electric vehicles registered (California is 10x larger at 229,723 PHEV’s according to IHS Polk data year ending August 31, 2016), Georgia PHEV sales are off over 90% and Georgia’s percent of total registrations is at only 0.4% vs. 0.8% national average. The combination of the elimination of the LEV/ZEV personal income tax credit in June 2015 coupled with the “usurious” PHEV registration fees ($204 this year) have brought the mainstream EV market to a screeching halt. At the national average of 0.8% there should be another 6,500-7,000 new PHEV’s on Georgia’s roads versus the 1,247 according to IHS Polk.

Foreign Oil Dependency in Georgia is Unabated. More money is spent on petroleum in Georgia ($30 Billion) than the State Budget ($20 Billion) with the vast majority of those funds leaving the state. In contrast, electricity is generated and consumed in Georgia and those funds stay in the state. CleanCities goal nationally is to reduce and ideally eliminate the United States dependence on foreign oil.

Legislators are leaving money on the table. The economic impact of EV’s in Georgia is well over $100 million per year between vehicle sales/resales, electricity consumed in Georgia and disposable income effects from lower cost electricity (yes even with gasoline at $2.50/gallon).

The PHEV Registration Fee is Punitive. The $200+ PHEV registration/road use fee is twice that of the next highest states ($100 in Michigan, North Carolina and Washington State). It needs to come down.

At the end of this final session, Mr. Francis put up the “Ask” slide and boldly put forth three recommendations which the Joint Study Committee positively received:

Restore a reasonable LEV/ZEV tax credit targeting 10% of the qualifying PHEV price with a cap of $3,000. Follow the Federal model of tax credit by battery size.

Reduce the Alternative Fuel Vehicles registration fee to $50.00.

Support EV charging station infrastructure. Address the language in the current legislation to enable the existing EV charging stations tax credit to be applied to commercial and retail properties. BOMA spokesman Mark Gallman provided similar testimony.

The committee thanked those providing testimony on behalf of Electric Vehicles with the prevailing sentiment expressed by Senator Butch Miller: “Something needs to be done but it is a question of balance. We need to find the right balance.”

Tim Echols created Georgia’s annual Alternative Fuel Vehicles Roadshow to showcase the capabilities of a wide variety of alternative fuels including electricified transportation.

Electric Vehicles and the Southeast Grid – Newly re-elected Public Service Commissioner Tim Echols and Union of Concerned Scientists‘ Peter O’Connor convened a two-day ‘think tank’ session to discuss the current and future state of electric vehicles, and charging infrastructure, to hear case studies from regional public utilities, and take a glimpse into the future of charging infrastructure. Workplace charging was tackled by one panel and Residential charging by another. Four public utilities (Duke Energy, Georgia Power, Florida Power and Light, Jacksonville Energy Association) shared the outcomes of their initiatives to support PHEVs and recharging infrastructure. Ally Kelly from The Ray foundation shared the plans to test bed roadway embedded EV recharging on the 18 mile stretch of Interstate 85 between Georgia and the Alabama State line named in honor of the late Raymond C. Anderson, the visionary Chairman of Interface who led the carpet industry into the recycled fibers technology. Audi’s EV Architect (coolest job title at the conference) Wayne Kallen said that the first full Battery Electric Vehicle from Audi is coming in late 2018!

So if one were to believe that all of the PHEV development work was taking place in California, this conference would surely have demonstrated that incredible advances are being made in the Southeast and in fact Jeff Kessler representing CARB (California Air Resources Board) said as much during his panel remarks.

During the post 2015 Georgia General Assembly era, the electric vehicle constituents in Georgia have been very busy advancing infrastructure (4,500 Public Level 2 charging stations and 375 Fast Charge plugs), and building the case for the Legislature to restore the State to a leadership position in the advancement of Electric Vehicles in Georgia.

Stay tuned as we watch how the next major development – the almost $60 million VW settlement Fund [if the State accepts it], is to be administered in Georgia. You can be sure that more charging stations (and even Superchargers) are on their way as the 2017 Chevrolet BOLT, the 2018 Tesla Model 3, all new Nissan LEAF and that all-electric Audi extend the reach the electric vehicles throughout the State of Georgia and beyond.

With the 2016 Georgia General Assembly session coming to its close, there was no action taken on either Bill introduced to reinstate a graduated EV tax credit or to reduce the $200.00/year AFV road use fee. As the owner/operator of 3 EVs (2014 VOLT, 2015 LEAF and 2015 Tesla) my bill from the State of Georgia for annual registrations is a whopping $768.00! Ouch!

With EV sales continuing to slide precipitously, a glimmer of hope lies in the establishment of an EV study committee by the Georgia State Senate; I hope to participate as both an EV driver and in my role as National Sales Manager for Current Powered by GE EV charging stations. The committee may not ramp up until after the summer, so check back for updates.

Fortunately, the Federal Goverment reinstated its 30% Income Tax Credit with a $30,000 maximum per job site both retroactive to January 1, 2015 and expiring on December 31, 2016. Here’s a handy link to the Alternative Fuels Data Center, THE source for Federal, State and Local incentives information: AFDC Federal EV Charging Infrastructure Tax Credit.

With the arrival of the 2017 Chevrolet VOLT, 2018 Chevrolet BOLT, Nissan LEAF and Tesla Model III (to be unveiled on March 31, 2016) many great new EV options with longer ranges and lower price tags will be available!

1). Three year program with tax credit level changing at the 18 month mark and an annual $30 Million Tax Credit Cap. Tax Credit would run from July 1, 2017 to December 31, 2019.

2). Tax Credits for EV’s with battery size of 4.0 to 10.0 kWh: $2,000 reducing to $1,000 on January 1, 2018. 10% Income Tax Credit against vehicle purchase price subject to these caps.

3). Tax Credits for EV’s with battery size >10.0 kWh: $3,000 reducing to $2,000 on January 1, 2018. 10% Income Tax Credit against vehicle purchase price subject to these caps.

4). Purchases and Leases are eligable. Ineligability for Georgia residents who were granted a tax credit ($5,000 ZEV tax credit reduced to $0 in 2015) the three prior years (2013-2015).

5). Tax Credit to business enterprises who install EV charging stationsat 10% of the charger cost subject to a $2,500 cap. Defintion of business enterprise is clarified in HB200 which cleared the House in 2015 and is still with the Senate.

This legislation is substantially what was proposed under HB220 in last year’s session with the notable inclusion of the EV charging station and slightly lower caps. Now the Bill needs a Republican co-sponsor and the best candidate is Don Parsons (R-Marietta) who chairs the House Energy Utilities and Technology Committee and is a member of the tax related committees: Appropriations and Ways and Means.

Watch this blog for updates as we did last year! If you live in metro Atlanta and support EVs, email or call your Georgia House Representative this coming week.

Just before Thanksgiving I was contacted by Matt Smith of Vice News to ask my opinion of the 2016 Chevrolet VOLT which has been awarded the Green Car of the Year Award, and to check in on the state of EV sales in Georgia post the repeal of the ZEV Tax Credit on June 30th. Here’s the link to the interview The Electric Car Industry Is Going to Make You Love Them. Here are the main points from the interview with more detail here:

1). 2016 Chevrolet VOLT is a nice improvement on the GEN 1.0 VOLT from an EV driving range (53 vs 38) but missed it completely by not offering the Quick Charge Package (DC Fast charging and 6.6 kW on board charger) the lower priced Nissan LEAF has offered for five years . I am looking forward to test driving the 2016 VOLT and comparing it to my 2014 model (my second VOLT; 2013 was leased). Might be another story in Vice News. Stay tuned!

I am seriously interested in test driving the 2017 Chevrolet BOLT which will be launched in January at the Consumer Electronics Show (CES) – how un-Detroit. Spy photos show a pretty attractive package and the guarantee of 200 mile EV driving range, today only available on the Tesla Model S70 (230 EV mile range).

2). EV sales post the repeal of the $5000 ZEV tax credit in Georgia are predictably down. My post from last month reviewed the precipitous sales drop but argued that Georgia has over 6,000 more EVs as a result of pull ahead sales and that new, lower cost EVs are coming in 2016 (BOLT), 2017 (Gen 2.0 LEAF) and 2018 (Tesla Series III) to reignite EV sales in Georgia.

So where is Georgia now #1? According to a recently released study shared by CleanCities Georgia this past week, Georgia has the highest EV registration fee of any state in the Union! $200 vs. $43-$100 for the states that do levy such a fee. As the Atlanta Journal Constitution intoned when the ZEV Tax Credit was repealed: “From First to Worst”.

The title song to Vicki Lawrence’s 1973 Hit (followed by a 1981 movie of the same title and covered in1991 by country star Reba McIntyre) says it all today, June 30, 2015 when the ZEV Tax Credit expires after 17 years at midnight tonight. In it’s wake has been the mad rush to buy and lease Nissan LEAF, Tesla Model S and new to Georgia’s KIA Soul EV before the tax credit expires and is replaced by nothing but the $200.00 annual EV Road Use Fee enacted by House Bill 170.

This author, after investing six months fighting to retain the EV tax credit in some, reduced form (see $914 Million Reasons blog post) leased a 2015 Nissan LEAF for his son at Law School in Virginia and purchased a 2015 Tesla Model S60 for his new business Georgia EVentures, LLC which rents out EVs for extended periods. If you can’t fight ’em, join ’em.

When all the dust clears, the elimination of the ZEV tax credit is likely to produce another 10,000 EVs on metro Atlanta roads as residents snapped up EVs in time for the tax credit. That puts Atlanta around 25,000+ EVs on its roads, helping it maintain a Top 5 EV city ranking.

What happens in 2016? There will be renewed effort to pass an EV tax credit, including PHEVs in the 2016 Georgia Assembly. Some in the state even think that Chuck Martin (House R-Alpharetta) may be the sponsor of the Bill. Speaking at the Alternative Fuel Vehicles 5th Annual Road Show (sponsored by Public Service Commissioner and indefatagible EV supporter Tim Echols) in Decatur GA, Elena Parent (Senate D-Decatur) pledged to introduce new EV tax credit legislation in the 2016 Georgia General Assembly. Let’s hope she can find a Senator across the aisle to partner with her. Brandon Beach (Senate R-Alpharetta) and head of the Senate Transportation Committee would be a good choice. I shared the $914 million dollar EV opportunity with him back in mid-March.

And Georgia Power/Southern Company has stepped up to the plate, backing its portfolio of EV charging station rebates with a fleet of 32 Chevrolet VOLTs to get the word out across the State of Georgia about the power of EVs (and their new Residential Solar Power incentives). Georgia Power is constructing over 60 fast charge and level 2 islands across the state to bring infrastructure to EVs beyond metro Atlanta.

Most exciting is the recent passage in the 114th CONGRESS of S. 1581 ‘to foster market development of clean energy fueling facilitities by steering infrastructure installation toward designated Clean Vehicle Corridors“. I’ll be watching to see if the House passes a similar Bill and a new focus on intercity/interstate Alternative Fuel Vehicles infrastructure is supported by the United States CONGRESS.

Stayed tuned and check back here as 2016 will continue to see the growth and expansion of electric vehicles and infrastructure throughout the State of Georgia!

As Governor Nathan Deal signed the Transportation Bill which repeals the ZEV/LEV Tax Credits, Public Service Commissioner Tim Echols shares his thoughts on what to do now in this guest post. Throughout the battle to keep some EV tax incentive, Tim has been a strong and unwavering voice in support of sustaining the growth of EV’s in Georgia. Many thanks Tim! #2016

All good things must come to an end By Tim Echols

It is official. The generous $5000 state tax credit for leasing or purchasing an electric vehicle is expiring June 30th. The Governor has signed the legislation that passed both the Senate and the House at the Capitol, and would-be electric car drivers are scrambling to get their Nissan LEAF, Tesla or other pure electric vehicle before the credit disappears.

Here are some factors you should consider before buying or leasing an electric car.

First, make sure a pure electric car works for your lifestyle. I live in Athens and lease two Nissan LEAFs, and it works great for my wife and daughter who scoot in and around Athens. When they need to go into Atlanta or drive out of state, they use my E85 car. They charge their cars in our garage and it costs about $20 per month on our electric bill.

Second, these cars have their limitations. Since I have been on the Georgia Public Service Commission, I have praised pioneers who bought or leased an essentially experimental car like a Tesla or Nissan LEAF. It is good for our environment and good for our grid. These consumers are choosing to use a “made in America” fuel too—homegrown Georgia electricity. But mark my word, you will experience “range anxiety” from time to time as you try to press the limit of the 100 mile range on the Nissan LEAF. Tesla owners…not so much. They just have to worry about making their giant car payment.

Third, besides costing less to operate, our Nissan LEAFs, both on a 24 month lease, save our family money. Our monthly lease payments are about $270 per month per car. Nissan “bakes” the $7500 federal tax credit into the transaction, and you simple file with the state department of revenue for the state credit. Figured over 24 months, that is $208 per month, leaving us with about $62 per month out of pocket for the car. We installed a garage charger for about $700 including labor, and the car never needs oil, water, transmission fluid…or gas. We feel like that great deal more than compensates for the “range anxiety” we occasionally experience.

Fourth, the local economy may get a boost from this transaction too. When that tax credit comes back to you, many electric car owners use it to pay college tuition for a child, or a bill, or just put it in the bank to offset the payments. According to the Georgia Department of Economic Development, for every one percent of petroleum-based miles traveled in Georgia that is displaced by electric vehicles, approximately $201 million dollars will remain in the state of Georgia annually. Each pure electric vehicle purchased keeps $2,242 annually in the state of Georgia by fueling with electricity rather than petroleum-based products.

Finally, electric cars help our grid. What you don’t hear is that electric car owners are helping Georgia cut electricity usage, which ultimately saves everyone money. How? Many shift their energy usage to the overnight hours due to an incentive from Georgia Power for electric car owners. According to a study of 1,000 Georgia electric car owners, these customers reduced their annual bill by $180 – even though they charged their car and didn’t buy gasoline for the entire year. This “load shifting,” as we call it at the PSC, saves them money and yet uses less “peak load” electricity resulting in cheaper bills for everyone.

Electric cars aren’t for everyone, but they work great for us. If you want to take advantage of the Georgia tax credit, you should act quickly. Meanwhile, feel free to contact me for more information at timothyechols@gmail.com and join me at the Alternative Fueled Vehicle Roadshow coming to a city near you. See more at www.afvroadshow.com and happy motoring.

Commissioner Tim Echols serves on the Georgia Public Service Commission and leases two Nissan LEAFS. He regulates electricity, natural gas and telecom for the state of Georgia.

Editors Note:To qualify for the $5,000 ZEV, Georgia residents must take delivery of the qualifying new vehicle (Nissan LEAF, Tesla Model S or Roadster, KIA Soul EV, VW eGolf, Mitsubishi Mio) by midnight June 30, 2015. The vehicle must be in your possession with a Motor Vehicle Purchase Agreement signifying delivery. Contact your automotive dealer/showroom for more details.